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CBDT has said the taxman has not been given any “unfettered“ power and adequate safeguards have been deployed for regulating the provisions aimed to check tax evasion from overseas locations. The Central Board of Direct Taxes (CBDT) expressed hope that the General Anti Avoidance Rules (GAAR) will be implemented from next fiscal. “There is no reason why it shouldn't come (from April 1next year).GAAR provisions are there in several countries.It's not that unfettered powers have been given to our Assessing Officers (of the IT department),“ CBDT chairman Atulesh Jindal said. The Economic Times, New Delhi, 3rd March 2016

Taxing consortium as `association of persons' is seen as a hurdle by foreign investors After a big infrastructure push in the budget, India is likely to clear the air on taxation of consortia, a structure used internationally to implement large infrastructure projects. “We have examined the issue. There is a genuine problem here. We will soon resolve it...We will issue a circular and if need be move an amendment to the law,“ a financial ministry official said. Taxation of consortium as “association of persons“ is seen as a key hindrance by foreign investors keen to partner the country to build its creaky infrastructure after authorities raised tax demands. Not just industry but many countries have also represented against tax of association of persons. High court rulings that have spelt out clear principles to define `association of persons' are likely to form the basis of the proposed clarification. The Narendra Modi-led NDA government has identified infrastructure development as…

The Employees' Provident Fund Organisation has announced an Incentive Refund Scheme that encourages employers to provide Universal Account Numbers (UAN) to all employees, a step aimed at bringing transparency and accountability to the EPF system. The scheme will enable employers to claim a refund of up to 10% of the administrative charge paid by them in each quarter, provided they qualify for it based on certain criteria.The scheme will be effective from January 1to December 31, 2016, a labour ministry notification said last month. UAN offers easy portability of PF accounts between employers. It also allows members to view their EPF accounts with current and former employers. If a company has provided member account details of 80% of its workforce to the retirement fund body and linked 80% of the accounts to Aadhaar as well as 100% to bank accounts and PAN numbers wherever applicable, it will be eligible for a refund of 10%, provided also that it has given UAN to all the members whos…

With pressure mounting to roll back the Budget proposal to tax withdrawals from Employees’ Provident Fund, Finance Minister Arun Jaitley ( pictured) on Wednesday said he was reviewing the matter. In the Lok Sabha, he said he would address it during the Budget discussion in Parliament. He was responding to Trinamool Congress ( TMC) members raising the issue soon after Question Hour. TMC Member of Parliament ( MP) Saugata Roy demanded that Jaitley make an announcement on this immediately. His party colleague Sudip Bandhyopadhyay said the Budget proposal to tax the Employees’ Provident Fund ( EPF) — a contributory retirement fund — has caused nationwide concern. Earlier in the day, too, Jaitley had said, “There have been some reactions [ to the Budget proposal]. When the debate comes up in Parliament, I shall give the government’s response on what decision we finally take.” In his post- Budget interactions with industry and trade chambers, the finance minister said Parliament had the first …

The banking and finance sectors have responded with large post- Budget gains. The Nifty Bank is up by over five per cent since Monday. From a technical standpoint, the signal is clear. Any trend following system will suggest going long and staying long, with a trailing stop- loss. Easing liquidity in the bond market and the hopes of more rate cuts from the Reserve Bank of India ( RBI) have driven the rally. The bond market went into a big rally on Budget day, with yields falling sharply. The reason was a positive surprise. Nobody expected the fiscal deficit to be held to 3.5 per cent of GDP ( gross domestic product). The governments borrowing programme in 201617 will be somewhat less than in 2015- 16. There are also hopes RBI will cut rates in early April, at its next bi- monthly policy review. Some optimists are hoping for an earlier rate cut --- after all, RBI made an out- of- turn rate cut in 2015. I am not so sure RBI will cut rates, either out- of- turn or in April. Retail inflation…

Lack of mention in the Budget was a disappointment for investors and developers After the finance minister did away with dividend distribution tax ( DDT) for real estate investment trusts or REITs, capital gains tax is the biggest issue for the developers/ investors considering whether to float one. “DDT was not the only issue. The other tax issue to be resolved is complete pass- through for capital gains,” said Jayesh Kariya, partner at BSR & Associates. When a REIT sells shares of a Special Purpose Vehicle ( SPV) or assets, the capital gain is taxable in the hands of a REIT. Investors/ developers want a complete pass- through. In the previous Budget, the government announced capital gains tax exemption at the hands of the sponsor but it is a big issue at the REIT level, consultants said. They say the finance ministry seemed agreeable to representations in this regard. Which is why the lack of a mention of this in the Budget was a disappointment. “Though the issue is not as big as DDT,…

Govt to present legislation in the Lok Sabha today The government could introduce a regulatory framework to ensure that the biometric details of citizens it collects is kept discreet and used only to generate Aadhaarnumbers or authenticate them. The Aadhaar Bill, which could be introduced in the Lok Sabha on Thursday, is likely to introduce this regulatory framework. It could also to propose that in cases of national security, an officer not below the rank of a joint secretary will be empowered to call for disclosure of such information. According to the revised list of business of the Lok Sabha, Finance Minister Arun Jaitley would introduce The Aadhaar ( Targeted Delivery of Financial and other Subsidies, Benefits and Services) Bill, 2016 on Thursday. It would be a money Bill, since it specifies its objective to provide targeted delivery of subsidies, expenditure of which will be incurred from the Consolidated Fund of India. A money Bill can only be introduced in the Lok Sabha. The deci…

In a move that will bring down one of the most common tax disputes, the income tax (I-T) department has clarified that the taxpayer can decide how to classify the gains from sale of shares—as capital gains or as business income. In a notification dated 29 February, the tax department said the determination whether a particular investment in shares or other securities is in the nature of a capital asset or stock-in-trade has led to a lot of uncertainty and litigation in the past, compounded by different interpretations of the law by courts. Therefore, the tax department has decided to take the interpretation away from the assessing officer’s hands and leave it to the taxpayer to make the classification. This means that a taxpayer dealing in equities can decide if it is an investment or his business. However, a classification once made in an assessment year cannot be changed in subsequent years. “Where the assessee itself, irrespective of the period of holding the listed shares and securit…

1.Request to join with family for Spritual and Cultural Programme organised by Art of Living, Near Mayur Vihar Extension Metro Station, Delhi from 11-13 March from 5PM onwards. Chief Guest Prime Minister and President of India. Entry Free.
2.Jurisdiction of AO in search cases cannot be challenged after one month of notice.This amendment will take effect from 1st June, 2016
3.Digital Signature is now mandatory w.e.f. 4th Quarter of FY 2015-2016 for dealers having turnover above Rs. 50 lakhs. It means all the returns and other correspondences should be filed with D-VAT department via digital signature only.
4.Power of CG to impose transitional product specific safeguard duty on imports from the People’s Republic of China, to omit section 8C of the Customs Tariff Act as the provision which was inserted for a period of ten years has lapsed. Clause 137, Omission of section 8C - THE FINANCE BILL, 2016
5.Extension to 31.03.16 of last date to file DP-1 under DVAT (onl…